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Islamic Finance Must Leverage Climate Action, Digital Inclusion and Islamic Innovation to Serve a Higher Purpose

Strategic Insights

— 1 min read

In a recent keynote address at the Islamic Finance News (IFN) Oman Forum 2025, Securities Commission (SC) chairman Datuk Mohammad Faiz Azmi emphasized the importance of aligning Islamic finance with three key drivers: climate action, digital inclusion, and Islamic innovation. He highlighted the need for finance to serve a higher purpose beyond just making a profit, citing Malaysia's recent achievements in climate resilience and adaptation. The country has received a 2.8 million euro grant from the Green Climate Fund to develop the National Adaptation Plan (MyNAP), a national priority following the devastating floods in 2021 that caused RM6.1 billion in losses.

Key Takeaways:

  • Malaysia has made strides in climate resilience and adaptation, with a 2.8 million euro grant from the Green Climate Fund to develop the National Adaptation Plan (MyNAP).
  • The SC's Maqasid Al-Shariah Guidance for the Islamic Capital Market Malaysia, released in 2023, aims to promote a strategic approach to Islamic finance that goes beyond profit-making.
  • Oman's Blue Carbon initiative and Wadi Dayqah Dam are inspiring examples of climate action that safeguards water supply and flood control.
  • Islamic fintech in Malaysia is thriving, with the industry valued at US$13 billion in 2024 and projected to almost double by 2028.
  • The ultimate goal of Islamic fintech is to deliver inclusion, not exclusion, through fractional access for retail investors and underserved communities.
  • Potential next steps in Islamic innovation include pioneering impact-linked sukuk, structuring tokenized Islamic social funds, and embedding Maqasid-based disclosures.
  • Malaysia and Oman have the opportunity to build an Islamic market ecosystem that uplifts societies, protects the planet, and serves a higher purpose.

Statistics:

  • Malaysia faces RM6.1 billion in losses due to 2021 floods
  • The Green Climate Fund grant for MyNAP is 2.8 million euros
  • Malaysia's Islamic fintech industry is valued at US$13 billion in 2024
  • Malaysia's Islamic fintech industry is projected to almost double to US$24.6 billion by 2028
  • Oman's Blue Carbon initiative covers 100 million mangroves
  • Oman's Wadi Dayqah Dam safeguards water supply and flood control for Muscat and Qurayyat.

Sources:

  • Bernama
  • Securities Commission (SC)
  • Islamic Finance News (IFN)
  • Oman's Vision 2040

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